Some employees will start receiving notices immediately as Microsoft joins the likes of Amazon and Meta with plans to cut thousands of jobs this year.
The Redmond, Washington-based company announced Wednesday (January 18) that it would lay off 10,000 employees in the coming months with “some notifications happening today.”
The planned cuts represent less than 5% of its workforce of about 200,000 employees. Microsoft said it would take a $1.2 billion charge to cover severance costs, hardware portfolio changes, and other expenses.
Microsoft CEO Satya Nadella said the company had to make “hard choices” to remain consequential “in this industry that is unforgiving to anyone who doesn’t adapt to platform shifts.”
He said customers wanted to “optimize their digital spend to do more with less” instead of accelerated spending seen during the pandemic. Many parts of the world were either in a recession or anticipating one, leaving companies across industries and geographies to exercise caution, he noted.
“At the same time, the next major wave of computing is being born with advances in AI, as we’re turning the world’s most advanced models into a new computing platform,” Nadella said.
Just last week, Microsoft said it was considering investing $10 billion into OpenAI, the owner of ChatGPT, a viral chatbot. Despite staff layoffs, the company said it would continue to invest in “long-term” opportunities.
Some 1,000 Microsoft employees were already fired in October when the company warned its cloud computing business was slowing down. Called Azure, it has been the main driver of Microsoft's revenue growth for years.
Earlier this year, Amazon announced it was cutting 18,000 jobs – or about 6% of its corporate workforce – to achieve “a stronger cost structure.” It started delivering notices to staff this week.
In November, Facebook parent Meta said it would eliminate 11,000 roles or 13% of its employees. Elon Musk slashed the number of Twitter’s employees by half after taking over the company in October.
Thousands of tech jobs have also been cut in China, with Alibaba, Tencent, and, most recently, TikTok parent ByteDance joining their American counterparts in mass layoffs.
More from Cybernews:
Subscribe to our newsletter